ATI cards are good, drivers can sometimes be a PITA, & media software [CMC] is IMHO barely usable, but that's only because I'm feeling charitable this am.
When an app that uses a tuner (or any video input) card looks for available hardware, it doesn't look for/at devices themselves, i.e. whether they're there or not, but looks for what Windows offers. For tuner cards to work there's actually a chain of software components that has to be assembled... there's a Microsoft app called Graphedit [& a freeware app called Graphstudio] for manually displaying & building these chains, & it's somewhat common to hear people talk about media software "building a graph", meaning assembling the needed components in order. When software can't successfully put that chain together, you get no tuner found, no hardware found etc messages. To get the card (or whatever hardware) working, that's what you have to fix -- AND, often going thru an R & R (Remove & Reinstall) like DA1745 suggested does the trick. Normally software doesn't break on it's own -- how could it -- and failures are caused by something being deleted or something incompatible being added... a fresh install can (& will hopefully) put stuff back.
That said, cards using the ATI Theater chip aren't all that trouble-prone, & neither is CMC -- Catalyst Media Center has been 100% consistent, always delivering its rather (IMO) dismal experience -- but some CMC code is rather old, so adding software, especially from Cyberlink, can break it by replacing files &/or settings it relies on with something newer & incompatible. Trying your tuner in another app can & should tell you if the problem is confined to CMC or not.
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"I have the drivers from diamondmm.com, but I am not sure if I should be using drivers from the ATI page?"
You've very basically just got 2 cards piggybacked on the same board.
Diamond may be your only source (other than the original driver disc) for the CMC software, though it works best if you don't do the whole install, but rather drill down to the CMC folder & install just that. The graphics part of the card should use the standard driver packs from ATI, but I'd strongly suggest reading thru the CCC driver section here at Rage3d in case there's any relevant problems (or advantages) to a particular version. I'd also suggest browsing over at avsforum.com -- it's much more of a problem in XP, but Vista & 7 still suffer from Avivo woes... in a nutshell, ATI cards process all video with a bunch of features collectively called Avivo, & some options can only be either opened up or set thru the registry. Bear in mind that (& this varies with driver version) hardware video acceleration on ATI's HD cards can break all sorts of video-related things in ways that don't always seem to make sense... 1 driver version a ways back required turning off accel in wmplayer or else DivX playback failed in all players, while the previous version of GBPVR required accel in PowerDVD be set to off when finding QAM stations, but on for viewing.
For the Tuner the drivers on the ATI site should work fine, & depending on how old the version is you've gotten from Diamond, may have included worthwhile updates -- OTOH, while there's a new version up most months, that doesn't mean new Theater drivers, & often the only change is the date on the cat file or something equally as silly. The Theater chip drivers are included in the regular graphics card driver set-up pack, & offered by themselves -- once or twice I think they were different, so I make it a practice to always halt install after setup expands everything into the ATI source folder, & check it out [universal extractor also works]. The Theater chip driver files for the AIW & separate hardware are named differently, but the difference is very slight, so be careful.
